Navistar posted a net loss from continuing operations of $0.04 per
share in the third-quarter fiscal 2014, considerably narrower than
the Zacks Consensus Estimate for a loss of $0.82. The results
benefited from better profitability in the North America Truck and
North America Parts segments. Meanwhile, revenues dropped 0.6% year
over year to $2.84 billion, missing the Zacks Consensus Estimate of
$2.99 billion. In fiscal 2014 Navistar expects Class 8 industry
sales between 235,000 and 240,000 units in the U.S. and Canada. The
company is positioned to benefit from product launches, cost-saving
initiatives and higher production. However, we are concerned about
economic uncertainty in Brazil and strict EPA regulations, which
are likely to impact profitability. Thus, we have maintained the
Neutral recommendation on the stock.
Based in Illinois, Navistar International Corporation (NAV)
manufactures and markets International brand commercial and
military trucks, MaxxForce branded diesel engines and IC Bus ("IC")
branded school and commercial buses. The company also provides
service parts for trucks and diesel engines. Navistar is one of the
largest truck producers after Daimler and PACCAR Inc.
Navistar operates through four industry segments, North America
Truck Segment (65.2% of total revenue in the first nine months of
fiscal 2014), North America Parts Segment (23.7%), Global
Operations Segment (14.5%) and Financial Services Segment (2.2%).
Segment revenues do not add up to 100% due to Corporate and
The North America Truck segment manufactures and distributes
medium and heavy-duty trucks (Class 4-8), military vehicles and
buses in the North American markets including the U.S., Canada and
Mexico. The products are distributed under the International and IC
brands. The segment also designs engines under the MaxxForce brand
The Global Operations Segment consists chiefly of the operations
of the company's wholly owned subsidiary, International Ind stria
de Motores da Am rica do Sul Ltda. (IIAA) in Brazil and truck and
parts export businesses under the International and IC brands.
The North America Parts Segment supports the brands of
International commercial and military trucks, IC buses, MaxxForce
engines, as well as the other product lines. The segment provides
proprietary products as well as standard truck, trailer and engine
The Financial Services Segment provides retail, wholesale, and
lease financing of products sold by the North America Truck and
North America Parts segments, as well as their dealers in the U.S.
Navistar International Corp. (NAV): Read the Full
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